Correlation Between Sparebank and Workspace Group
Can any of the company-specific risk be diversified away by investing in both Sparebank and Workspace Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sparebank and Workspace Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Workspace Group PLC, you can compare the effects of market volatilities on Sparebank and Workspace Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sparebank with a short position of Workspace Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Workspace Group.
Diversification Opportunities for Sparebank and Workspace Group
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sparebank and Workspace is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR and Workspace Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workspace Group PLC and Sparebank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sparebank 1 SR are associated (or correlated) with Workspace Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workspace Group PLC has no effect on the direction of Sparebank i.e., Sparebank and Workspace Group go up and down completely randomly.
Pair Corralation between Sparebank and Workspace Group
Assuming the 90 days trading horizon Sparebank 1 SR is expected to under-perform the Workspace Group. In addition to that, Sparebank is 1.05 times more volatile than Workspace Group PLC. It trades about -0.02 of its total potential returns per unit of risk. Workspace Group PLC is currently generating about 0.1 per unit of volatility. If you would invest 54,800 in Workspace Group PLC on September 3, 2024 and sell it today you would earn a total of 1,500 from holding Workspace Group PLC or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sparebank 1 SR vs. Workspace Group PLC
Performance |
| Timeline |
| Sparebank 1 SR |
| Workspace Group PLC |
Sparebank and Workspace Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Workspace Group
The main advantage of trading using opposite Sparebank and Workspace Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank position performs unexpectedly, Workspace Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Workspace Group will offset losses from the drop in Workspace Group's long position.| Sparebank vs. Porvair plc | Sparebank vs. Gaming Realms plc | Sparebank vs. Cairn Homes PLC | Sparebank vs. Bloomsbury Publishing Plc |
| Workspace Group vs. SMA Solar Technology | Workspace Group vs. Concurrent Technologies Plc | Workspace Group vs. Automatic Data Processing | Workspace Group vs. Datagroup SE |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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